Hurst Inverse Moving Average
Overview
The Inverse Moving Average was a tool that Hurst used to assist him in determining the dominant cycles on the chart. In a complex market, it can be difficult to spot the cycles, this tool helps with that.
Hurst often referred to this as an “Inverse Half-Span Average”. He made the following quote, “What a Moving Average throws away can be recovered by subtracting the average from the price-motion data”. This gives us a clue on how it is calculated. We start with a centred moving average with a length half the dominant cycle length. Then for each bar, the distance from the midpoint of the bar to the average is calculated and plotted on the histogram.
The cycle lows will be more obvious as they will be the low points on the histogram. This can be done for all cycle lengths by adjusting the length of the Inverse Moving Average to the length of the cycle that you wish to examine.
To add the tool to your chart, select the tool from the Hurst tool group, and left-click on the chart to add the tool. Optuma will then draw the tool in a window below the chart using the default settings.
Actions & Properties
Actions
Copy Data to Clipboard: Will copy the tool’s values to the clipboard which can then be inserted into a spreadsheet, for example, allowing for further analysis.
Add to Toolbar: Adds the selected tool to your custom toolbar.
Apply Settings to All: When multiple Hurst Inverse Moving Average tools have been applied to a chart, page or workbook, this action can be used to apply the settings of the one selected to other instances of the tool. This is a great time saver if an adjustment is made to the tool - such as line colour - as this allows all the other Hurst Inverse Moving Average tools in the chart, page or entire workbook to be updated instantly.
Copy Tool: Allows you to copy the selected tool, which can then be pasted onto a different chart window.
Move to Back: If the tool is displaying in front of other tools or indicators clicking this action will move the tool view to the background.
Move to Front: If the tool is displaying behind other tools or indicators on the chart, clicking this action will bring the tool to the forefront.
Restore Default Settings: Click this action if you have adjusted the default settings of the tool, and wish to return to the standard properties originally installed with Optuma.
Save Settings as Default: If you have adjusted any of the tool’s properties (colour, for example) you can save the adjustments as your new default setting. Each time you apply a new Hurst Inverse Moving Average to a chart, the tool will display using the new settings.
Delete: Deletes the tool from the chart.
Properties
Tool Name: Allows you to adjust the name of the tool, as it’s displayed in the Structure Panel.
Bars: Sets the number of bars to be used in the HIMA calculation.
Offset: Moves the tool forward or backwards in time. The offset is measured in bars, so a value of 2 will push the tool forward 2 bars and -2 will move the tool back 2 bars.
Plot Style: Allows you to change how the HIMA is displayed on your chart. There are 6 options available: Line, Dot, Histogram, Step, Shaded, Shaded Step.
Line Style: The Line Style property allows you to adjust the type of the line displayed. There are 8 options available: Solid, Dots, Dash, Dash Dots, Long Dash, Long Dash Dot, Long Dash Dot Dot, Stippled.
Line Width: Allows you to adjust the width of the line. Moving the slider bar to the right increases the thickness of the line.
Histogram Colour Scheme: When the Plot Style is set to Histogram you can elect to display the Histogram using a single colour, different colours for positive and negative values or the same colour scheme as the Price Chart.
Line Colour: Allows you to select the colour of the line. Clicking on the drop down arrow will display a colour swatch. Locate the desired colour and left-click it once to select it.
Fill Up / Down Barrier: When the Plot Style is set to Shaded you are able to adjust the barrier value, i.e. the margin between the two correlation plots. The default value is 0.00.
Fill Up Colour: When the Plot Style is set to Shaded you are then able to alter the Fill Colour for the tool.
Fill Down Colour: When the Plot Style is set to Shaded you are then able to alter the Fill Colour for the tool.
Fill Transparency: When the Plot Style is set to Shaded you are then able to adjust the shading transparency. Moving the slider to the left will increase the transparency of the tool.
Tool Transparency: Use this slider bar to adjust the transparency of the tool. Moving the slider to the left will increase the transparency of the tool.
Visible: Un-tick this checkbox to hide the tool from the chart.
Show In Price Scale: When selected the current HIMA value will be displayed in the Price Scale.